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``Betting the company''

Any major change can be seen as gambling with the billion-dollar market capitalisation of the company. Yet most companies that attain great value then lose it do so by failing to adapt when technological progress or the market demand they change. Part of the art of running a company is making a number of small bets, each with a limited downside and unbounded potential gain. This is how you bet on the future without betting the company; rarely need a current revenue stream or key product be put squarely at risk--there's almost always a way to structure a transition so the new is allowed to compete with the old, with the market rendering the ultimate verdict as to which is better.

Since markets embody the wisdom of thousands or millions of people, and management contains but a handful, providing a variety of alternatives and seeing which succeeds allows a company to lead an industry while following the market. To do otherwise is to ``bet the company'' either on the judgement of a few individuals or, even worse, on the market's suddenly ceasing to evolve. You can bet the company by doing nothing.

And lose just as much.

Editor: John Walker